September: massive month for diplomacy

By Andrew Hammond

The stand-out diplomatic highlight each September is usually the annual U.N. General Assembly meetings in New York; yet this month sees much stronger competition in a massive month of global summitry that includes the BRICS ― referring Brazil, Russia, India, China and South Africa ― and the Shanghai Cooperation Organization (SCO) forums, as well as potentially a special Afghan meeting of the G20, including South Korea.

The SCO summit on Sept. 16-17, which will see the Taliban takeover in Kabul feature highly, will see leaders from Russia, China, India, Pakistan, Tajikistan, Uzbekistan, Kazakhstan and Kyrgyzstan convene.

The SCO is still a relatively little-known grouping, but covers some 60 percent of the Eurasian continent, on which 3 billion people reside, accounting for almost half of the world's population. And it could yet grow further, with Mongolia, Belarus and Iran observers in the group, while Armenia, Azerbaijan, Turkey, Cambodia, Nepal and Sri Lanka have received dialogue partner status.

As important as the SCO is, however, it is the BRICS that continue to capture much more of the international limelight. The reason is, partly, that the five powers are increasingly flexing their muscles on the world stage, pushing for a world order that includes a bigger role for developing nations.

While the origin of the SCO lies in defense and security, it is economics that drove the formation of the BRICS, reflecting the fact that the five powers account for around a quarter of the global GDP, and over 15 percent of world trade. In its first decade, the bloc became a more cohesive force, with a strong desire to advance the member countries' development strategies by coordinating macroeconomic policy.

Yet, the bloc is increasingly seeing political cooperation rise to the fore, and that is exemplified by this year's Indian presidency. The four priorities for New Delhi in 2021, with the leadership summit on Sept. 9, include enhancing intra-BRICS anti-terrorism cooperation, and enabling greater people-to-people interaction.

India's other priorities include delivering the Sustainable Development Goals, reform of the multilateral system to deliver on what the BRICS countries say is a common ambition of the sovereign equality of all states, and respect for territorial integrity. This emphasis on reforming the multilateral order is also showcased in broader BRICS projects, including in the creation of the New Development Bank, an alternative forum to the World Bank and International Monetary Fund.

The bank finances infrastructure and other projects in the BRICS, along with a related 100 billion dollars special currency reserve fund. One driver is the perception that it will allow BRICS to better promote their interests abroad, strengthening positions and opinions that are sometimes ignored by their western colleagues.

Another recent initiative, perceived to challenge American and wider western preponderance in information technology, was agreed upon when the BRICS signed a letter of intent to cooperate in the sector.

These examples underscore the hunger of the BRICS to become even bigger political players, rising fears in some quarters that the bloc could, ultimately, become a unified anti-Western alliance. However, such a scenario is most unlikely in the immediate future, and the bloc will probably not decisively move beyond an increasingly institutionalized forum for emerging market cooperation any time soon.

Part of the reason for this situation is the bloc's diverse interests, as showcased by Beijing's periodic tensions with New Delhi. These tensions have been one driver behind the meetings of the Quadrilateral Security Dialogue (Quad) network of powers, comprising India, the United States, Japan and Australia.

At the same time that the BRICS are stepping up their political cooperation, there is growing skepticism of the relevance of the group as an economic club given the diverging long-term economic trajectory of the powers. Pre-pandemic, there was generally robust economic performance in China and India over the past two decades, contrasting with disappointing results in Brazil, Russia, and South Africa. However, even India went into recession in 2020, while China was the only major global economy to grow.

Yet, despite the member countries' diverging fortunes, the BRICS' share of the global GDP has grown by over 10 percentage points from around a decade ago, and this share is having a major global impact. World Bank research, for instance, has shown that, for the first time in some two centuries, overall global income inequality between countries appears to be declining, driven by the emerging market powers.

At the same time, however, there is an opposing force: growing income inequality within many countries. Such worsening inequality has assumed growing political salience, helping to fuel populist, nationalist politicians including Brazil's Jair Bolsonaro.

With these countervailing pressures pushing against each other, the net global trend for the past 200 years has been toward greater overall income inequality. Yet, there is evidence in the last two decades that the "positive effect" of growing income equality between countries is superseding the "negative effect" of increasing inequality within nations.

Especially post-pandemic, it is unclear whether this dynamic has sufficient momentum to keep driving forward a more equitable world order. This issue will therefore be one of the major agenda items at September's summit, given the concerns that the fragile process could yet go into reverse, post-pandemic, especially if growth in China and India flattens significantly.

Andrew Hammond (andrewkorea@outlook.com) is an associate at LSE IDEAS at the London School of Economics.